Reference no: EM132618519
Problem 1. Depreciation is
a. a decrease in the fair market value of an asset.
b. an expense that is incurred during an accounting period.
c. a method of saving cash to replace plant assets.
d. added to the cost of equipment on the balance sheet.
e. shown on the balance sheet as a liability.
Problem 2. Accumulated Depreciation, Equipment, is shown as a(n)
a. expense on the income statement.
b. liability on the balance sheet.
c. deduction from net income on the statement of owner's equity.
d. contra account on the balance sheet.
e. addition to equipment on the balance sheet.
Problem 3. The type of account and normal balance of Accumulated Depreciation are
a. contra asset, debit.
b. asset, credit.
c. asset, debit.
d. liability, credit.
e. contra asset, credit.
Problem 4. The adjusting entry to record depreciation of equipment is
a. debit Accumulated Depreciation; credit Depreciation Expense.
b. debit Depreciation Expense; credit Accumulated Depreciation.
c. debit Equipment; credit Accumulated Depreciation.
d. debit Depreciation Expense; credit Depreciation Payable.
e. debit Accumulated Depreciation; credit Equipment.